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06 September, 1999
Greece should consolidate the political and economic stability it has achieved by working for timely entry into the euro zone, in turn spurring economic and social growth, Prime Minister Costas Simitis said on Saturday.
In his annual economic policy speech at the Thessaloniki International Trade Fair, Mr. Simitis said that aligning with the 11-member euro bloc would buffer the country and its economy from upheaval abroad, allowing the government to accomplish its goals of a 15-trillion-drachma investment plan in 2000-2006 and higher social spending.
"In a single year, Greece faced (successfully) international financial and economic crises in major countries, the war and turbulence in its immediate environment, and the impact of unforeseen rises in oil prices," the premier told a dinner. "The country must move forward.
The government is steadily and responsibly moving towards economic and monetary union ... This will eliminate the main elements of uncertainty, risk and inordinate cost that characterized the isolated currencies of small countries."
Helping to safeguard the economy was the drachma's entry into the European exchange rate mechanism in March 1998, which also has acted as an incubator for euro zone entry, the premier said.
In addition, joining the euro would make Greece part of the EU bloc that was set to become a key player in the global arena as a counterweight to a single superpower, currently the US, he added.
A politically powerful European Union is needed more than ever as a factor in global equilibrium," Mr. Simitis said.
The final stumbling bloc to euro entry on January 1, 2001 was lowering inflation below two percent from the current 2.1 percent and 5.2 percent last year. But a new round of cuts in indirect taxation on fuel and automobiles announced last week would aid both the counter-inflationary drive and real incomes, the premier added.
Furthermore, easing inflation would help lending rates to fall further, again aiding households. Workers and business had responded to the government's call last year for wage and price restraint.
The benefits of tight fiscal policies in past years were starting to appear, allowing the government to ease off and make genuine concessions to people on low and middle incomes, and with families.
The changes, along with measures to combat unemployment and support for the farm sector, were not pre-election handouts, Mr. Simitis said. National polls are due in September 2000.
Greece is to apply for euro zone membership by mid-March 2000 with approval expected at the EU's summit in June of the same year.
In a speech strewn with references to the need for stability and cohesion, Mr. Simitis warned that work was needed to maintain the progress already made.
"Our gains were hard to make, but we could very easily lose them if we fail to consolidate our achievements," he said.
The premier called for the avoidance of ructions over elections for a new president of the republic early next year.
"Our position on this matter is clear. Constitutionally, election of the president of the republic is a mandate for unity of the political system, and not a butt of party political conflict," Mr. Simitis said.
He stated his party's support for President Kostis Stephanopoulos as candidate for the election.
Commenting on national elections, Mr. Simitis said: "At a time when a smooth political course is required, we believe that artificially bringing forward the elections as a form of blackmail does not serve the country, and erodes institutional procedures."
Despite tight economic and monetary policies, Greece was successful in the standard of living it had attained.
"The United Nations has ranked Greece 20th among countries on the basis of social and economic prosperity. It lies in the top 13 percent of the world's population in terms of economic and social development," Mr. Simitis said.
The government had also managed to maintain a rise in social spending, bucking the European trend, he added.
The key to Greece's future was lowering interest rates, utilizing CSF funds, completing structural changes in the economy, liberalizing telecoms, electricity and maritime transport markets in 2001, helping to rebuild the Balkans, and hosting the 2004 Olympics, the prime minister said.
Progress in the future would mark the continuation of a historic step taken in 1974 when Greece embarked on its European orientation under the late Constantine Karamanlis and then the late Andreas Papandreou, he added.
Opposition reactions:
Reacting to the prime minister's speech on Saturday, main opposition New Democracy party spokesman Aris Spiliotopoulos spoke of panic and criticized him of placing the country in an undeclared pre- election period of indeterminable time and at the same time involving the institution of President of the Republic in his partisan petty evaluations.
The Coalition of the Left and Progress said Mr. Simitis turned the rostrum of the 64th TIF into a pre-election balcony.
On his part, Democratic Social Movement DHKKI leader Dimitris Tsovolas accused the Prime Minister of making insipid pre-election promises.
Simitis urges re-election of President Stephanopoulos
Prime Minister Simitis yesterday urged the country's political parties to re-elect President Kostis Stephanopoulos in order to avoid early elections in March, a move that could jeopardise the economy and entry into the euro zone in 2001.
Mr. Simitis told a news conference that the president had been a success in his post. He had respected constitutional procedures and was welcomed by the majority of the public.
The ruling PASOK party had proposed that Mr. Stephanopoulos should be re- elected by parliament in line with public opinion, and saw no reason for a change in president, he said.
Relations with Turkey:
The premier also said that a European Union foreign ministers' meeting in Finland yesterday had accepted Greece's proposals for aid to earthquake-stricken Turkey.
The informal meeting had endorsed a proposal by Foreign Minister George Papandreou that two pending financing arrangements should be activated of 14 million ecus and 150 million ecus in order to help fund reconstruction after the earthquake, the premier said.
In addition, the council of ministers backed a proposal that Turkey should receive a loan from the EU as earthquake aid.
The question of a financing protocol for Turkey that Greece has vetoed was not raised at the meeting, Mr. Simitis added.
He said that Greece maintained unchanged its policy on problems created by Turkey in the Aegean, and had already proposed their resolution through recourse to the International Court at the Hague.
Concerning Greece's earthquake aid to Turkey, the prime minister said that the country operated a principle of assisting other countries, especially neighbouring ones, when disaster struck.
"Our principle is friendship and cooperation among peoples and the earthquake cannot be viewed as an opportunity, because that would make a mockery of our policy," Mr. Simitis said.
"We are exercising a policy of peace and cooperation, and Turkey should examine its own line, its own views, and finally make a move that will help to bring a major improvement in the climate."
On the question of US President Bill Clinton's visit in November, Mr. Simitis said the US president is welcome in Greece, but the agenda of talks has not yet been determined. However, he believes that the Cyprus issue, Greek-Turkish relations, the European Union and Greek-US relations will be discussed.
"I don't think and I don't believe that he will be carrying any message," he said.
Economic measures:
Finally, the prime minister said that a package of economic measures announced last week, including tax cuts, were not pre- election hand-outs, but proof that the economy was making good progress.
He added that new options would open for the economy following entry into the euro zone, whose target date is January 1, 2001. The package of measures were part of the government's plan to take Greece forward.
"This policy has nothing to do with elections. It is about the way ahead and the government's new four-year term," Mr. Simitis said. He added that there would be no new concessionary measures.
Mr. Simitis said the Stock Exchange was a tool for growth, while many businesses draw a great deal of capital from it, but it also has certain individual aspects. He added that there was gambling on chance and speculation, but the government was trying to control these aspects.
Referring to the issue of educational reform, Mr. Simitis said educational reform was necessary, stressing the existence of inflexibility in the educational system.
He said educational reform was showing certain problems of adjustment and changes will be brought about wherever this is necessary.
Asked to comment on relations between the Church and the state, Mr. Simitis said the Church preoccupies itself with ecclesiastical issues and the state handles its own issues. He said the creation of a mosque in Athens is a decision which is up to the state, while the Church can have its own say.
Mr. Simitis was also asked about the upcoming visit to Greece by Pope John Paul II, saying that the Pope is a head of state and in this capacity he is welcome to visit the country.
Source: Athens News Agency
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